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IRS Workers Disciplined For Misconduct Were Awarded Bonuses

Infractions Included Failure to Pay Taxes and Fraud

By

John D. McKinnon

April 22, 2014 8:53 p.m. ET

More than 2,800 Internal Revenue Service employees who recently had been disciplined received performance bonuses totaling more than $2.8 million between Oct. 1, 2010, and Dec. 31, 2012, a government audit found.

The misconduct ranged from failure to pay taxes to misuse of government travel cards, violation of official-conduct standards and fraud, according to the report by the Treasury Inspector General for Tax Administration. The discipline included written reprimands, suspensions and even removal. The oversight agency said some of the conduct issues might have occurred after an employee earned a bonus.

While the IRS doesn't prohibit bonuses, "providing awards to employees with conduct issues, especially the failure to pay taxes owed to the federal government, appears to be in conflict with the IRS's charge of ensuring the integrity of the system of tax administration," the report said. (See the report.)

For fiscal 2012, the IRS gave bonuses to about two-thirds of its 98,000 employees. Some lawmakers have been critical of the practice.

The report identified nearly 1,200 employees with tax issues or official-conduct violations during the period who received a total of $1.1 million in monetary bonuses, and about 11,000 hours of time off. One employee who was suspended for 10 days in September 2011 received a $1,300 performance award in August 2012, the report said.

For employees represented by the IRS union, the contract specifically states that disciplinary investigations or actions generally won't preclude a performance bonus.

The IRS does withhold performance bonuses in some high-profile circumstances. For instance, officials denied awards to the division involved in the targeting of grass-roots conservative groups, the report noted.

IRS officials said the agency developed links conduct to bonuses for executives, and is considering a similar policy for the entire IRS workforce.

In a statement Tuesday, the agency noted that the watchdog didn't find any violations of federal regulations.

"The IRS takes seriously our unique role as the nation's tax administrator," the agency said. "We strive to protect the integrity of the tax system, and we recognize the need for proper personnel policies."